Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Video Games in Japan

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Executive Summary

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PROSPECTS

Nintendo Switch effect set to be temporary

Nintendo Switch was behind the largest sales of video games in Japan ever witnessed in 2017. The static console was first launched in the market in March 2017 and made an instant impact on gaming accessories and console games, with the latter returning to growth for the first time in several years.

Mobile games need ignition to stay relevant

Mobile games have long been the driving force of video games, with the category recording exponential growth over the review period. However, mobile games is reaching saturation with growth rates set to achieve a much slower pace in Japan.

Internet retailing remains the dominant distribution channel

Video games is one category in Japan that is characterised by an exceptionally high ratio of internet retailing. The strong popularity of mobile games, which are downloaded through internet platforms such as AppStore and Google Play, boosts the overall performance of online sales.

COMPETITIVE LANDSCAPE

Nintendo retakes first spot thanks to the popularity of Nintendo Switch

Nintendo reclaimed first position in the category during 2017 after Nintendo Switch’s successful performance. Previously the company had lost competitiveness with the rapid growth of mobile games in Japan, which forced mobile-game developers, such as Mixi and GungHo Online Entertainment, and software developers including Bandai Namco, Square Enix and Capcom, to shift their resources to mobile game developments.

Competition intensifies in the stagnant mobile games category

The mobile games category had long been the main driver of video games’ growth in Japan. The leading companies behind this trend, Mixi, GungHo Online Entertainment, Colopl, LINE and Bandai Namco, characterised the category between 2013 and 2015 when the mobile games category grew substantially with these players building the category’s framework.

New launches boost sales during 2017

The positive performance of static consoles was underpinned by the March 2017 launch of new consoles, including Microsoft’s X Box One X, as well as the launch of Nintendo Switch. The X Box One X entered the market in November 2017, with some retailers taking pre-orders and strong Christmas sales of what is the world’s most technologically advanced video games console.

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